When pundits name-check “the welfare-warfare state,” we usually mean, and are usually understood to mean, something along the lines of “bread and circuses at home, military adventurism abroad.”

That’s as good a definition as any, I suppose, and certainly an accurate description of today’s global political environment, but it fails to really capture the nature of the post-WWII trend in US politics.

In America, the “welfare” and “warfare” aspects of the state have, over that period, achieved a near-perfect merger. Rather than representing one side of two mutually reinforcing but nominally separate sets of policies, US “defense” spending has become the single largest, and by far most redistributive, welfare program in the federal budget.

This phenomenon is best illustrated by the Hobson’s Choice offered in the final debate between US president Barack Obama and Republican presidential nominee Mitt Romney: “Draconian cuts” of 10% growth (yes, you read that right) over the next five years (Obama) or 18% growth over the same period (Romney). Real cuts aren’t even on the table. Like Henry Ford said, you can get any color Model T you want, as long as it’s black.

The numbers are constantly changing, but a 2010 baseline looks like this:

Approximately 1.4 million Americans work as members of the armed forces, and another 1.6 million workers labor in the civilian “defense” industry. These Americans are welfare clients of the “workfare” variety.

As an economic factor, they might just as well be digging holes and filling them back in (in fact, as a US Marine infantryman, I did quite a bit of exactly that!). The vast bulk of the work they do serves no “legitimate” function with respect to actual defense of the United States from attack or invasion, and in fact more likely increases the risks of such.

Some high double-digit percentage — I think 75% is a reasonable and conservative estimate — of “defense” spending is not about “defense” in any meaningful sense of the word. It’s about keeping those 3 million workers on the clock, and keeping their politically connected employers in profit.

Those 3 million workfare clients cost the American taxpayer $700 billion per year — $233,000 per client. But they don’t take that much home, of course. If their average income tracks to US per capita, they take home an average of $41,500 per year each, or a total of nearly $125 billion.

Where does the other $575 billion go? That’s the gross rakeoff, after workfare costs but before other overhead, of the real welfare queens: “Defense contractors.” If we generously assume that 25% of that rakeoff actually does produce “legitimate” defense benefits, they are knocking down more than $430 billion in welfare checks. But let’s be fair: According to the US Department of Defense, the top 20 “defense” contractors average a profit margin of only about 4%. So, $17 billion.

With that much money at stake, the $30 million or so that “defense”-related contributors have spent on the 2012 election so far is chump change: About 2/10ths of 1% of the profits they get from having politicians on their side.

If that was the end of it, it would be pretty bad — one out of every five dollars earned by American workers siphoned off on an incredibly inefficient welfare program. But that’s not the end of it at all. The existence of the welfare program is a major incentive for going to war early and often.

First, when you have a $700 billion hammer, it’s easy to fall into the habit of looking at every problem as a nail.

And secondly, welfare programs are expected, by everyone involved, to demonstrate their own necessity. If peace breaks out, the workfare clients go back to doing something else … and “defense” contractors have to cut back on the caviar and brie.

There’s no easy way out of the situation. If we have a welfare-warfare state, we’re going to spend a lot of blood and treasure on wars. And if we have a state, it’s going to become, and do everything in its operators’ power to remain, a welfare-warfare state. You can have politics or you can have peace, but you can’t have both.

Not to nit-pick, but it was not the Model A but the Model T that was only available in black, and only from 1914 to 1925. A range of colours was available in 1906-13 and again in 1926-27, as also on the A through 1931 and on models thereafter. No use giving detractors a hole to start worrying at, however irrelevant.

This does explain why the most sophisticated of US military hardware is becoming deadly but fragile. Long gone are the days when one could expect the military version of just about anything to be durable, abuse-proof, and as close to indestructable as a man-made artefact can be. As with so many other things, the introduction of micro-electronics has allowed things to be thoroughly disposable without thereby becoming unfit for their purpose.

One thing about your figgerin', Mr Knapp: those in the .mil welfare sector get a bunch more than the average. Base salary is not a good guide, since there are a bunch of other benefits: for example the base salary for an Army Sergeant with 4 years' in is only about $29k, but health care and other benefits raise that to an approximate total remuneration of $54k. Even an E1 (base pay &lt;$18k) gets another $20k (roughly) in non-cash benefits.

The core of your thesis is undeniable though – like all .gov cronies, the big-time .mil welfare queens are at the top of the pyramid. you know the type: they mewl at Georgetown cocktail parties about how much tax they have to pay and how they're subsidising inner-urban welfare moms.

As I made clear to my younger sister (formerly a soldier, then a defence bureaucrat, then a Senior Advisor to our Prime Minister… now a 'consultant'): every dollar paid to a .mil welfare queen, is extorted from the polity. If they then give some of that back to the tax base from which they drew it, they can't be seen as 'taxpayers', but as 'recipients of slightly less tax-funded welfare'.

Same goes for every single politician, every single judge, every single bureaucrat – every single person who is paid from the tax take. They are ALL welfare queens. If they offered a value for money service, they could make a decent living by simply hanging out a shingle and relying on voluntary purchase of their offerings.

To a lesser extent, any profession in which a premium is earned through government-mandated licensure – law, accounting, medicine – is also a welfare recipient (although not to the same extent) due to the artificial barriers to entry that protect them from competition and give them, thereby, oligopoly power. (And forget about the idea that price falls to marginal cost as a result of Bertrand equilibrium: it is not a sustainable proposition to argue that the pay rates for barristers – as an example – are anything like the competitive equilibrium level… and the various trades unions for doctors, lawyers, accountants and such, clearly seek to control QUANTITY and so a Cournot or Stackelberg solution is much more likely).